Cyrus Capital and Bain Capital have emerged as the final two contenders to rescue Virgin Australia.
In a statement to the ASX Deloitte Restructuring Services announced that New York-based group, Cyrus Capital Partners, which has long been a financial partner of Sir Richard Branson’s Virgin airline brands, and Bain Capital are the winners of the second round bids.
The other contenders were; BGH Capital, Indigo Partners and Canadian investor Brookfield Asset Management.
A wildcard in the race for Virgin Australia is the Forrest family’s Tattarang Pty Ltd investment arm, according to local Perth financial sources with all the overseas bidders in talks with Tattarang to partner in the rescue of the embattled airline.
One of the major criteria for administrators Deloitte is the retention of staff and Cyrus’s bid is built around keeping as much of the airline intact as possible.
Under its plan, the airline would keep most of its 75 Boeing 737s for domestic routes and its Boeing 777 international fleet but most of the other types would go.
One of its goals is to replace the 777s with a fleet of more fuel-efficient and flexible 787s identical to the ones that Qantas uses to fly the Perth to London non-stop route.
BGH, appears to have been knocked out because it pitched a small start-up fleet of just 15 operational planes while Indigo partners was going to take the airline down market.
Vaughan Strawbridge, Joint Administrator and Deloitte Restructuring Services partner said that the next stage in this sale process begins today.
“Over the weekend through to today, we assessed the proposals received from shortlisted bidders and discussed their proposals with them to ensure a thorough and comprehensive assessment has been undertaken. Five non-binding indicative proposals were received on Friday, and they have now been further short-listed to two preferred bidders.”
“Both Bain Capital and Cyrus Capital Partners are well-funded, have deep aviation experience, and they see real value in the business and its future.
“We would like to thank all interested parties for the strong interest they have displayed in the business and their commitment to the process over recent weeks.
“We will now spend the coming weeks facilitating in-depth bidder engagement with the stakeholders of the business and work closely with both preferred bidders in the lead up to binding final offers being received.
The strong interest coming from all parties has generated the competitive tension we have sought that is important in a process such as this, and we are in a strong place when it comes to delivering the best possible commercial outcome for all creditors, and to see a strong and sustainable Virgin Australia emerge from this process. It is still the intention to have a binding agreement in place by 30 June, which remains unchanged,” he said.